That may actually be an easy one to fix. I have been trying to tweak my boot up on my Mandrake 9.1 installation to improve the speed. One thing I did that produced the same error that you got was to use the
compact flag in my /etc/lilo.conf file. That shaved a few second off a Debian box I had, but the hard drives in this machine don't seem to like it. I got the same garbled goop, and never got past the initial bootscript.
I solved it by booting from a rescue disk (always good to have a boot floppy lying around for this reason - I think I used the cd) and, once booted, I fired up a text editor as root ad opened my /etc/lilo.conf file. Once in, I commented out the
compact line. I saved the new file and ran /sbin/lilo so the new config file took. A reboot proved that it was fixed. If you have that line in your /etc/lilo.conf, I bet its the culprit. Good luck